CALGARY - Baytex Energy Corp. (TSX:BTE) said Tuesday it will spend $120 million to acquire about 46 sections of undeveloped oilsands leases near its core assets in the Cold Lake area of northeast Alberta.

The Calgary-based company also said it has received regulatory approval to build and operate a bitumen recovery scheme using steam-assisted gravity drainage (SAGD).

It expects to proceed with a pilot project next year, followed by a commercial plant that would begin producing 5,000 barrels per day in 2016.

Baytex has also identified additional areas that are prospective for thermal development.

The acquisition adds an approved SAGD project to Baytex's assets, which includes thermal recovery projects at Seal in the Peace River oilsands and at Kerrobert in southwest Saskatchewan.

Baytex said development of the thermal recovery projects provide a source of long-life, low-decline production that will allow it to grow over the long term.